Stocks for the Long Term

[Louetta]

Bought GM, about a three year low for the stock. Pays 5%, dividend well covered by earnings, $1.52 against $4.57 or close to those numbers. Reading articles, they are making a pretty good push into affordable EVs. Figure to hold forever.

[BlueWolf]

March 3, 2020 Portfolio & Watchlist

I opened a few more positions and added to others today. I also somehow omitted FSLY which I opened on Feb 28th. I’ve added it to the list. Here are my latest positions and newest watchlist:

Current LT Positions:
AAPL, AAXN, AMT, ANET, APPN, AYX, CGNX(.5), CRM(.5), CRWD(.5), DDOG, DOCU, EDIT, EEFT(.5), ETSY, FICO(.5), FLGT(.5), FRPT(.5), FSLY, IIPR(.5), INSP, ISRG, LVGO(.5), LYV, MA(.5), MDB, MDLA(.5), MELI, MSFT(.5), MTCH, NVCR, NVDA, NVTA, OKTA, PING(.5), RDFN(.5), RGEN(.5), SDGR(.5), SHOP, SMAR, SPCE(.5), TDOC, TEAM, TREX, TTD(2), TWLO, VEEV(2), WD(.5), WIX(.5), ZEN(2), ZM, ZS(.5)

Current LT Watchlist:
ABMD, ADBE, AMZN, APPF, ATVI, BIDU, BILI, BRK/B, BZUN, COUP, CRNC, CRSP, DAVA, EPAM, EQIX, ESTC, EVBG, EXPI, FB, FVRR, GH, HCAT, HQY, HUBS, KNSL, LITE, MASI, MNST, NEE, NTNX, OLLI, PANW, PAYC, PYPL, QTWO, ROKU, RVLV, SFIX, SPLK, SQ, SWAV, TLRA, TSLA, TTWO, V, WORK

Bold = New Stock or Altered Position
(.5)= 1/2 Position
(2) = Double Position

[Louetta]

Hadn't noticed WD before. Interesting choice.

[BlueWolf]

Hadn't noticed WD before. Interesting choice.

I have been tracking WD off and on now for about a year as it drops in and out of my watchlist. It has been a bit of a spectacular growth story, which is what initially brought it up on my scans. Since their IPO in 2010, revenue has expanded at a spectacular annualized rate of 25%. I opened a position because I like the long term up churn of its chart and the fact that, like many recent stocks, it pulled back hard to a strong area of support on the daily. I also like the fact that it gives me a bit of diversification as I am always heavy with tech stocks (inevitable if you chase growth like I do). This makes my second foray into real estate this round along with RDFN. I am a little more excited about RDFN, which has a unique business model, but WD is a steady earner and you can always use a few of those in your portfolio.

I also took on a few speculative, big upside positions too, most notably a personal favorite, MDLA. I have some slight reservations about the sustainability of their business since they are a 20 year old business that has take a while for them to home in on and refine their product and business model. I really like their unique product, however, and they seem to be executing as their quarterly revenue growth since going public has been excellent.

On a final note, please join me, if you have a mind to, in praying for the victims of the CoronaVirus. This is a deeply troubling infestation that is rocking the lives of a lot of people.

[BlueWolf]

A few more updates today, mostly doubling down on a few positions. Here are my latest positions and newest watchlist:

Current LT Positions:
AAPL, AAXN, AMT, ANET, APPN(2), AYX(2), CGNX(.5), CRM(.5), CRWD(.5), DDOG, DOCU, EDIT, EEFT(.5), ETSY, FICO(.5), FLGT(.5), FRPT(.5), FSLY, IIPR(.5), INSP, ISRG, LVGO(.5), LYV, MA(.5), MDB, MDLA(.5), MELI(2), MSFT(.5), MTCH, NVCR, NVDA, NVTA, OKTA, PING(.5), RDFN(.5), RGEN(.5), SDGR(.5), SHOP, SMAR, SPCE(.5), TDOC, TEAM, TREX, TTD(2), TTWO, TWLO, VEEV(2), WD(.5), WIX(.5), WORK, ZEN(2), ZM, ZS(.5)

Current LT Watchlist:
ABMD, ADBE, AMZN, APPF, ATVI, BIDU, BILI, BKNG, BRK/B, BZUN, COUP, CRNC, CRSP, DAVA, EPAM, EQIX, ESTC, EVBG, EXPI, FB, FVRR, GH, HCAT, HQY, HUBS, KNSL, LITE, MASI, MNST, NEE, NTNX, OLLI, PANW, PAYC, PYPL, QTWO, ROKU, RVLV, SFIX, SPLK, SQ, SWAV, TLRA, TSLA, V

Bold = New Stock or Altered Position
(.5)= 1/2 Position
(2) = Double Position

[Louetta]

Boy, ZM, TDOC, WORK, DDOG, EDIT all bucking the trend today. Some others.

[BlueWolf]

Boy, ZM, TDOC, WORK, DDOG, EDIT all bucking the trend today. Some others.

Yeah, and I’m kicking myself because I was waiting to pull the trigger on doubling down on TDOC and ZM. I’ll either have to wait for a little pullback or just go ahead and buy into their strength.

[BlueWolf]

Yeah, and I’m kicking myself because I was waiting to pull the trigger on doubling down on TDOC and ZM. I’ll either have to wait for a little pullback or just go ahead and buy into their strength.

Maybe it wasn’t such a bad thing after all. Getting pummelled today.

[BlueWolf]

Well, I don’t think we are going to see an end to this downtrend until the CoronaVirus is somewhat contained, and that could be quite a while. I definitely feel like I was too aggressive re-entering so soon, but I’m going to ride it out. The jobs report that just came out was strong, but there no doubt that the virus scare is having an impact on the global economy. In any event, no more buying right now, and I don’t recommend that anyone take any positions just yet. There will be some incredible buying opportunities when this ends, but I don’t see the end of the tunnel yet.

[jiesen]

Well, as luck would have it the main product of my POTY pick (and one I own), CERS, deactivates coronavirus(es) in donated blood.... so hooray for me? (CERS is up another 3% today, too)

[billyjoe]

If a person believes the market is dead and will never recover then he should get out. If one believes this is a glitch and recovery will eventually turn things around why not hold or buy quality high dividend stocks and harvest the reinvested shares? Assuming there won't be wholesale dividend cuts the return should be the same monthly, quarterly, yearly whether the portfolio is worth 200K or 150K. If you don't have to use the proceeds you'll be rewarded with many more shares when the market recovers be it one, two, or three years.

--------------------billy

[BlueWolf]

If a person believes the market is dead and will never recover then he should get out. If one believes this is a glitch and recovery will eventually turn things around why not hold or buy quality high dividend stocks and harvest the reinvested shares? Assuming there won't be wholesale dividend cuts the return should be the same monthly, quarterly, yearly whether the portfolio is worth 200K or 150K. If you don't have to use the proceeds you'll be rewarded with many more shares when the market recovers be it one, two, or three years.

--------------------billy

That is indeed one defense strategy, BillyJoe, but it typically doesn’t generate much income unless your sitting on an extremely large portfolio. It is also a strategy that many retirees use when they want to go into a more cautious mode with the ability to extract income. Personally, I’m not that keen on buying stocks just for their dividends. I do, however, always direct my broker to reinvest the dividend I do get back into the stock because I don’t need the income right now.

[mimo_100]

from Marketwatch

Opinion: Pick up these ‘next generation’ technology stocks while they’re on sale

shares of companies like Roku, Twillio, Cree and Chegg have more potential because they are more “next generation” tech names,

Published: March 7, 2020 at 11:18 a.m. ET By Michael Brush
Companies such as Twilio, Chegg and Enphase Energy are the FAANGs of the future, says Kevin Landis of the Firsthand Technology Opportunities Fund

[BlueWolf]

Well, crap. What else is there to say about this insane market. I got out at just the right time, but got back in way too early. The good news is that I am still sitting in a far amount of cash, and I intend to keep that powder dry until I see some concrete signs that this thing has bottomed. For now, I am going to hold my long term positions, while I actively trade to cover my drawdown. I wanted to write this post to share my thoughts on strategies you can use when you get caught in a major correction like this. Let me preface these remarks by saying that I am basing my chosen strategy(ies) on the belief that because this correction is not based on economic factors (yet), there will be some significant bounces. I will be shorting, as I did today, but it is in those bounces that I intend to also book a lot of cash. Here are some of the strategies I considered, and my thoughts on them:

1) Using covered calls.
Not viable, because I don’t hold 100 share increments in all my positions.

2) Buying protective puts.
Viable, since I don’t have to own stock in 100 shares increments, but difficult to use when you want to spread the risk across your stocks according to the since of your position. You could instead buy some protective puts on some of your holdings, trading or rolling them if the stock prices continues to drop. The downside is that you may be stuck letting them expire worthless, and therefore lose your premium, if you mistime time and the prices of the stocks you are protecting go up. Not for me.

3) Buying puts against the indices.
There are a number of ways to do this including puts against index ETFs, e.g. QQQ, SPY, and DIA. This isn’t an unreasonable hedge, but again, if the indices head up after you’ve bought your puts, the premiums you paid will eat into your stock profits. Again, not for me.

4) Hedging with positions in closely related stocks.
This strategy, which is sometimes used by hedge funds in various forms, involves buying or short selling stocks that are different from the stocks you own, but basically in the same segment of the market. A long side hedge is usually used when you have expectations for growth in a market segment, but you are unsure who the ultimate winner is going to be. You therefore go long in multiple competitors to hedge against the chance you picked the wrong company. In the case of a dramatic market downturn like the current one, you short sell competitors in the same segments as the positions you hold to allow the generation of profits while the markets heads south. I actually use the long side of this strategy, but I am not a fan of the short side as I feel strategies 5, 6, and 7 are more fruitful.

5) Shorting the stocks you own.
This is called “shorting against the box.” Since most brokers (all that I personally know of) won’t let you short a stock you currently hold long, however, this usually requires opening a separate account from which to short. Like most of the other strategies, this only works if the market continues to head down. If the market heads back up after you have shorted, your short positions will eat into your profits until you close them. This actually works nicely, however, if you are convinced the market is headed much lower. In that case, you let the short positions build up profits until you feel the market has bottomed, and then you close your short positions, and ride the long positions back up. Of course this mean you need to be pretty accurate in calling a bottom, which can be very tough to do. I have not ruled out using this strategy because I am not convinced there won’t be yet more spikes down, but, at the most, I will probably only use this strategy on a selective basis, i.e. for some but not all of my long positions.

6) Shorting stocks you don’t own.
With this strategy, you are basically just shorting the market. Just like any day and swing trading, you scan for short setups and then short those stocks when they trigger. I definitely plan to use this strategy as I did today.

7) Playing the long bounces.
If you are caught in a really rapid, deep correction, as we have been, you can bet there will be some significant bounces. These bounces will provide really great opportunities to generate some profits. The thing to consider here is whether or not you are willing to swing trade long, or just day trade. Since swing trading implies holding your positions overnight, it opens you up to “gap disease,” i.e. gaps up or down in share price at the next day’s open that are caused by overnight news. Personally, there is no way I am going to do anything except day trade, i.e. round trip with a single day, in the current climate. Other than that restriction, I will definitely utilize this strategy.

I hope this helps someone.

[Louetta]

Good write-up. Today another method was suggested to me: the Buffett method. You buy good stocks and hold on through thick and thin. I was, of course, much too well brought up to mention Buffett owns large positions in four airlines and a variety of banks. I did buy some more STOR which is a holding of one of Buffett's lieutenants.